FED Holds Steady

[Non Sequitur]

The truth is that first time home buyers are priced out of the market due to high interest rates. The Fed can always lower the rates and then raise them again if the desired results do not work. The truth is that it is all speculation at this point.

I disagree. Interest rates would need to be lowered to pandemic levels to math up median income with median home prices, and that's not going to happen. Rates were too low for too long and coupled with historic money printing/inflation, the real estate market can't self-correct. IMO we won't see a real recovery until income catches up, and that's years down the line.

 

[J Grant]

The Fed reserve might be the last agency to hold out against Trump pressure - If Powell can withdstand it.

Trump calls himself the king of debt, his RE companies had six major bankruptcies, and he leaves a string of failed businesses behind. He lost many of his own properties and assets due to risky decisions and overleveraging and leases his name on most of the buildings bearing his brand. His lapdog Republicans voted for this BBB, predicted to add trillions more to the debt ( Trump added 7 trillion more in his first term). The BBB raised the congressional debt ceiling by four trillion dollars - after years of the GOP threatening to shut down the government whenever the democrats asked for a small increase to avoid default. Letting Trump dictate interest rates would be a disaster, much as I would like the spate of volume. Prices need to cool doown, which they are doing. A moderate cut of a rate will occur when it needs to occur.

 

[djd09]

...,waive them all

 

[djd09]

Inflation posts biggest rise in four months, PCE shows​

... too much money in the system

 

[Surf Cat]

This statement sounds like a CNN story. "Could" is thrown around in the media like the term "experts" to make a story. The truth is nobody knows for sure.

No....not from CNN. When I do check out news channels such as cnn, Fox News, msnbc, newsmax, Etc. I always alternate between those channels. They all have an agenda.

Back to the matter at hand, the FED typically lowers interest rates when inflation is too low.

Inflation is climbing again in the United States as of mid-2025. The annual inflation rate, as measured by the Consumer Price Index (CPI), rose to 2.7% for the 12-month period ending in June 2025, up from 2.4% in May.
This marks the highest rate since February 2025 and reflects a 0.3% increase in consumer prices from May to June, the fastest monthly pace since January.

While lowering the interest rates would help us as appraisers right now, what really needs help is the appraisal industry itself. More than ever you would think that the valuation of real estate would be of utmost importance.

The continuing demise of valuation using avms, waivers, pdcs, and other products other than the real estate appraiser..... especially through thieving AMC's is concerning.

Wages have increased in all sectors... our wages are going backwards.

 

[Surf Cat]

The truth is that first time home buyers are priced out of the market due to high interest rates.

First time home buyers are not just priced out due to high interest rates. It's a combination of yes, higher interest rates (not historic highs), wages not keeping up with inflation, high home prices (look what happened to the prices of homes during those historic low interest rates), and competition from investors pricing the first time home buyer out.

Shoot, forget first time home buying for the youth.... just renting is a challenge. Also, look up credit card debt..... it's higher than ever. There's an air of uncertainty for the American economy. I don't blame the FED for holding Pat.

 

[Joe Flacco]

Doesn't matter what the fed does. The market will send the rates down if it needs to go down.

 

[Joe Flacco]

The 10 year is 4.35% and the fed funds is currently 4.25-4.5%. The normal spread is 1-2%. So even if the fed cuts rates a full percent, the 10 year yield and mortgage rates might not even move at all.

 

[J Grant]

First time home buyers are not just priced out due to high interest rates. It's a combination of yes, higher interest rates (not historic highs), wages not keeping up with inflation, high home prices (look what happened to the prices of homes during those historic low interest rates), and competition from investors pricing the first time home buyer out.

Shoot, forget first time home buying for the youth.... just renting is a challenge. Also, look up credit card debt..... it's higher than ever. There's an air of uncertainty for the American economy. I don't blame the FED for holding Pat.

add to all the above rising homeowner insurance charges , HOA fees and condo fees increasing, higher RE taxes etc all add to carrying costs.

 

[Joe Flacco]

The rising long-term moving average for the 10-year yield is now at 3.25% Even if the Fed doesn't cut the fed funds rate, if the market thinks borrowing rates need to go down, they will send it down.

I don't think the Fed ever leads the market. What is likely to happen is that if and when the time comes, the market will send the 10-year down to the moving average around 3.25%. The Fed will then probably cut rates to 3%. And once the Fed cuts rates to 3%, the 10-year will move back up to the current range. Then we will be back to a normal spread between the 10-year and Fed Funds.